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Labour productivity, hourly compensation and unit labour cost
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Note to readers: First quarter 2008
This chapter presents an analysis on labour productivity for the aggregate business sector and its constituent industries (15 two-digit NAICS industries) and sub-sectors (goods and services). The statistical series for total economy, business sector and non-commercial sector start with the first quarter of 1981, while those at industry level are available only back to the first quarter of 1997.
The term "productivity" refers to labour productivity. Calculations of the productivity growth rate and its related variables are based on index numbers rounded to one decimal place.
For more information about the productivity program, see the National Economic Accounts module. You can also order a copy of a technical note about the quarterly estimates of productivity by sending an email to productivity.measures@statcan.gc.ca.
Revisions
The first quarter 2008 labour productivity estimates released on June 13, 2008 include revisions to aggregate labour productivity and underlying series (gross domestic product, hours worked, unit labour costs, etc.) from 2004 to 2007. These updates are consistent with the four-year annual revision to the National Income and Expenditure Accounts released May 30, 2008. However, the national accounts' estimates of gross domestic product (GDP) by industry will not be revised until the end of September 2008 (the usual revision release date for GDP by industry), and, therefore, will not be incorporated in the productivity estimates until the release of the third quarter data in December 2008. As a result, revised estimates of labour productivity and related variables by industry will only be available with the third quarter release.
Labour productivity is the ratio of output to labour input (hours worked). Quarterly estimates of productivity are derived from a Fisher chained index of GDP, or of value added, in the business sector. Economic performance as measured by labour productivity must be interpreted carefully, since these estimates reflect changes in other inputs in addition to the growth in productive efficiency.
Labour compensation includes all payments in cash or in kind made by domestic producers to persons as remuneration for work. This includes salaries and supplementary labour income of paid workers, plus the imputed labour income of self-employed workers.
Unit labour cost is the labour cost per unit of output. It is calculated as the ratio of labour compensation to real value added. It is also the equivalent of the ratio of labour compensation per hour worked to labour productivity. The unit labour cost will increase when hourly compensation rises faster than labour productivity.
Unit labour cost in US dollars is the equivalent of the ratio of Canadian unit labour cost to the exchange rate. This latter corresponds to the U.S. dollar value expressed in Canadian dollars.
